What kind of role does an Actuary play in Mergers & Acquisitions?
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Many actuaries spend their entire career on mergers and acquisitions. Financial projections prepared from actuarial models are frequently the centerpiece of the negotiation process. Actuarial assumptions used in the projections are critical. That's why there are normally actuaries on both sides of the table. Also, the actuary needs to understand the background and objectives of their client in pursuing the transaction. There may be synergies with the acquired company that change the actuarial assumptions used. Further, the selling company may have important reasons for the transaction. Once the transaction is agreed to, actuaries need to be extensively involved in due diligence and tax issues. I have had some very bad experiences when due diligence is not performed well. Our work depends on information received from the other side, and we always need to confirm that the information is correct and what we think it is.